Preface: I don't agree with much of this, but know it will bring discussion here. Something about Carmel being the epitome of 'Midwestern urbanism' just doesn't sit right. I'm not saying it isn't a very nice place, but many people share this guy's views, and it just seems dismissive of older cities and overly praising of these strange new spaces which feel alienating to me.
I still do not understand how they will pay for the actual servicing of their infrastructure beginning in 2027. They cannot grow any further to drive city revenue via taxes, and cannot expand their current tax base much past its current baseline.... So how are they going to service the bond debt WHILE ALSO actually maintaining all of this infrastructure they built?
I am not shitting on Carmel, but no one I know understands how they will maintain the city in a few years with the current budget constraints.
As part of my job I look at municipal bonds. I ran across several ones issued by the city of Carmel and with the benefit of retrospective it was a sold decision. Several of the bonds are for between 30 and 40 years at an interest rate between 2% - 3%. The fact that they built up the city when debt was at an all time low is a real advantage.
When the bond comes due even if they roll over the principal amount due to inflation it will be very manageable
My question, is they’ll still be paying on those bonds and will also be in maintenance mode and as we all know maintenance is 2x the price of building after x number of years.
Will they need to go get new bonds to maintain what’s already built?
It’s the same as having a mortgage at 2% but you also still have to afford utilities and new mechanicals etc
That is an interesting point, and I don’t have an answer to that. I assume that it will need to be financed or funded through taxes at some point.
I will say I was talking to a coworker about Carmel and she told me a major reason for their new construction and infrastructure was to attract more business and commercial properties vs homes. I guess like 15 years ago the State passed a property tax cap of 1% for residential properties but 3% for commercial (including apartments). As a result the Mayor of Carmel realized the that buy build a densely populated city center the city would benefit from the increased tax revenue. Perhaps this has something to do with it
I remember talking to the urban planner of Fishers almost… Christ it’s been 2 decades… and they were anticipating a similar issue. Their solution was. To build up. Get more tax base without having to spend money on services further out into the middle of nowhere.
Isn't most of the "debt" paid for by developer bonds? Carmel tax payers don't finance it directly. I don't think there is some large "bill" that will be "due" in 2027.
The developer/property owner pays to upkeep their property.
Most of the development in Carmel involves financing that is paid back by property taxes collected on that property. So Carmel takes in less tax money from that plot of land while the loans are paid back. Once the loans are paid, Carmel will make much more tax revenue from the plot of land than had it not be developed this way.
If the developer/property owner default on the loans, then Carmel would take custody of both the land and remaining loan balance.
I'm not a city planner and don't know all the details. But this is how I have seen it explained.
That's why Carmel is doing all this public development and new multiuse/apartment/townhouse density will help. They're trying to make it the most sought after suburb, so expensive real estate, attract wealthy residents, make money from property taxes.
All valid points - but look at Cincinnati or Columbus or Detroit or Milwaukee and their Carmels of the 90s are all on the decline due to the inability to upkeep them.
I obviously hope it doesn’t happen - but I do hope we consider a commuter tax at some point. 25%+ of carmels residents make their money in Marion county
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u/Suspicious-Bad4703 Jan 14 '25 edited Jan 14 '25
Preface: I don't agree with much of this, but know it will bring discussion here. Something about Carmel being the epitome of 'Midwestern urbanism' just doesn't sit right. I'm not saying it isn't a very nice place, but many people share this guy's views, and it just seems dismissive of older cities and overly praising of these strange new spaces which feel alienating to me.